Slow development of CSP industry in India caused by policy approach

Published byCSP Today

Thursday 12 June 2014

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Four years after the National Solar Mission was announced, only one tenth of the intended Concentrated Solar Power (CSP) capacity has been connected to the grid successfully, with more expected to go online later this year.

The government, together with the Asian Development Bank (ADB), are changing tactic to attract the international players back and boost the development of the CSP industry in India.

In 2010, the Ministry of New and Renewable Energy (MNRE) announced Phase I of the National Solar Mission (NSM). Although the plan has proven to be very effective in creating a strong national solar photovoltaics (PV) industry, it has failed to do so with Concentrated Solar Power (CSP).

Abengoa Solar, the leading CSP developer internationally with almost 2GW implemented in all of the solar markets worldwide, including Spain, South Africa, the UAE, Mexico and many more, bid unsuccessfully in Phase I of the NSM. Like most other international developers, this was as a result of the competitive reverse bidding mechanism that was implemented. They currently have only a 3MW pilot project at the Indian Institute of Technology, which has been in operation since 2011.

However, the policy shift set by the Solar Energy Corporation India (SECI) may attract Abengoa back to developing projects in India. In a recent interview with CSP Today, Shiv Shukla, President of Abengoa Solar India, outlined Abengoa´s experience with Phase I and their recommendations to avoid pitfalls in the next CSP bidding process.

One of the important requirements, according to Shukla, is experience. ‘For a successful selection of solar developers, the bidding document must include strong technical pre-qualification requirements for bidders, including experience in building, owning and operating CSP plants’. Shukla goes on to say that ‘inexperienced developers may put forward unrealistic offers which they cannot carry out later on, leading to a non-fulfillment of targets’ .

The recent announcement of two 50MW pilot projects to bridge the gap between Phase I and Phase II of the NSM is what is attracting the international community back to India. Shukla hopes that the government ‘will include strong pre-qualification criterion backed with strong technical requirement and performance guarantees’ for these projects. This is because ‘a more hands-on and guided approach from the government is necessary to move the industry forward in the desired direction’.

To download the full 3 page interview with Shukla, that also includes other opinions on what the Indian government needs to do to make CSP viable India, visit the website below: